Australia's Rex posts 9% fall in H1 profit

Australian regional carrier Regional Express (Rex) has posted an 9% fall in net profit for its first fiscal half-year, as a result of lower passenger numbers and weaker cargo demand.

Its net profit for the six months ended 31 December 2009 fell 9% to A$9.6 million ($8.6 million) from A$10.5 million in the corresponding period a year ago.

This was due to lower revenue and partly due to the absence of aircraft sales, which contributed A$440,000 a year ago, says Rex.

Total revenue fell 13% to A$117.8 million, it adds. Total costs and expenses decreased 14% to A$104.9 million.

This was "mainly due to lower fuel and engineering costs and favourable foreign exchange gains, all of which totalled A$14.5 million", says the carrier.

"The global financial crisis continued to affect the period with activity slowly stabilising and passenger numbers toward the end of the period becoming comparable with those of the previous year," adds Rex.

The total passengers carried by the airline fell 9% to 641,552. Capacity, as measured by ASKs, fell 4%.

As a result, the passenger load factor fell five percentage points to 63.1% from 68.1%, says Rex, adding that this is "still deemed reasonable for a regional airline operation".

During the reporting period, Rex's subsidiary Pel-Air completed a restructuring of its freight operations, says Rex. Eight Fairchild Metro freighters were grounded, and replaced by three Saab 340 freighters, it adds.

However, there was increased profitability and activity in mining charters for Pel-Air, it adds.

"Medivac operations suffered with the decision to undertake an extensive avionics modernisation programme within the [IAI] Westwind jet fleet resulting in some aircraft being taken out for the modifications," says Rex, adding the upgrade will continue until the end of the current fiscal year.

As of 31 December 2009, Rex operates a fleet of 47 aircraft, up from 43 as of 30 June 2009.